Group 5

Origins of the Brand Snapple• Need-Gap Analysis / Line FillingThe three friends identified the popularity and need of ‘No-Preservative Fruit Juices’• Line Extension (Reason: To keep the Distributors occupied)The product line was extended by adding:

• Carbonated Drinks• Fruit-Flavored Iced Teas• Diet Juices• Seltzers• Isotonic Sports Drink• Vitamin Supreme

• Some succeeded, Many Failed. Premium pricing on successful products helped them offset the losses due to the failed ones.

• Distributors wanted company to advertise so Snapple roped in the Tennis Star ‘Ivan Lendl’. The ads were as bad as company’s packaging. And because they were bad, they didn’t do any harm to the brand.

• Snapple aspired to appeal: ‘The Target Group’Young, Health-Conscious, Urban Professionals of 1980s.• Competitors: ‘The New Age Alternative Beverage Category’• Napa Naturals, Natural Quencher, SoHo, After the Fall, Ginseng Rush, Elliot’s Amazing, Old Tyme Soft

Drink, Manly Sodas, Syfo, and Original New York Seltzer.

Product Line & Product Depth Extension

Lemon Tea Kiwi Strawberry Mango Madness Peach Tea

Pink Lemonade Diet Peach Tea Fruit Punch Raspberry Tea

Every Product line had an additional 16-ounce Glass bottle, 64-ounce and gallon Plastic, in addition to the existing 32-ounce bottle

Product Line & Product Depth Extension

Brand Identity of Snapple

• Quirky, Offbeat and New Age fashionable alternative to standard soft-drinks

• The labels on its bottles were cluttered and amateurish, and its ads seemed homemade

• People loved it because the brand had been real and human in its approach

• Wendy Kaufman, a plum, cheerful and eccentric personality with a brash New York accent was the Brand Ambassador

Brand Image of Coca Cola vis-a-vis Snapple

Positioning of Snapple

Snapple is defined by what it is NOT

Brand Positioning Statement

To The kids & adults, Snapple, is the brand of All natural quirky drink that gives you variety of best tastes because it keeps you healthier and happier each day wherever life takes you. The brand character is offbeat, playful and authentic.

TimelineSnapple was founded1972

• Arnie Greenberg, Leonard Marsh, and Hyman Golden – ‘All Natural Apple Juice’ – Snapple.• “100% Natural” became Snapple’s mantra.

Annual Turnover was $4 Million1984Annual Turnover was $8 Million1986Sales grew to $80 Million1989The turnover went on to be $231 Million1992Annual Turnover was $516 Million1993Snapple + Gatorade = Powerful beverage business unit?1994

• Quaker bought Snapple for $1.7 Billion.

Triarc Beverage Group1997• Quaker sold Snapple to Triarc Beverages for $300 Million.

THE GOOD

• 20% sales from super markets• Adopted off beat marketing

techniques. • Well defined brand image : “100 %

natural” • Market leaders in the Alternate

beverage industry. Which was very hard to define.

• Use of research to fix the brand

THE BAD

• Lousy distribution system.• Too many flavours. Not all were a

hit amongst the masses. In fact only the lemon tea flavour contributed to 15% of the sales.

• Concentrating only on the east coast for their distribution, whereas the west coast had more demand and deeper pockets.

1987 – 1992: The growth Era

The three mistakes of Quaker

Sacking of Howard Stern , Rush Limbaugh &Wendy Kaufman

Inability to come to a consensus with the distributors

Incorrect size of Snapple products leading to loss in sales

Cold Channel • Comprising of street vendors,

delicatessens, restaurants and recreational areas

• Gatorade had a weak presence • Use Snapple’s middlemen to take

control of cold channel

Warm Channel• Comprising of Supermarkets• 60% of Gatorade's sales moved via

the warm channel• Snapple could take advantage of

Gatorade's expertise in packaging, supply chain and management

1972 1977 1982 1987 1992 1994 19970

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Sales Growth

1997 : Triarc Acquires Snapple

Triarc’s top executives: Chairman and majority owner Nelson Peltz, CEO Mike Weinstein, and Marketing Director Ken Gilbert said that

“There is a vital interplay between the challenge a brand faces and the culture of the corporation that owns it. When brand and culture fall out of alignment, both brand and corporate owner are likely to suffer.”

Change of fortunes of Snapple under Triarc

What did Triarc do differently?• “We started out loving the brand the first day,” says Gilbert.

• In contrast to Quaker’s professional culture, Triarc had a very unconventional and bizarre culture and hence, Triarc’s executives understood and embodied the quirky spirit of the Snapple brand in a way that Quaker’s marketing team never did.

• No game plan to assure Snapple’s recovery. The only fixed plan was to limit the cost of failure.

• To Quaker, new products were seen as a risk. Triarc perceived them as an opportunity. Hence, Never said “NO” to a new product developed.

What did Triarc do?• Bought Wendy Kaufman back as the Brand Ambassador

• The give-it-a-go approach paid off again later when Triarc launched a Snapple extension called Elements, a range of teas with flavor names like Sun, Rain, and Fire. Within a few short months, Elements had grown to 15% of Snapple’s total sales

• Ditched the much-despised 32- and 64-ounce bottles

• Distributors were contacted again and were promised good sales

Snapple once again had an owner that understood the spirit of the brand

Snapple: Post -Triarc Acquisition

• In the year 2000, Cadbury paid $1.45 billion for Snapple and a number of other Triarc brands, including Royal Crown, Mistic, and Stewart’s of which the Snapple brand was worth $900 million to $1 billion of the total deal value

• Cadbury Schweppes' demerged its US fizzy drinks business. The spun-off business, with sales of £2.8bn, was listed on the NYSE, trading as Dr Pepper Snapple Group (DPSG). Dr. Pepper, Royal Crown, Mistic, Stewarts, 7Up and Snapple will be part of the new spun-off entity

• In 2015, Dr. Pepper Snapple Group had a market share of 17.3% of the total soft-drink market with sales of $6.28 Billion

Strengths• Wide product line• Strong brand image / heritage / meaning• Strong and meaningful spokesperson• Well established distribution network

Weaknesses• Snapple’s brand lacks clearly established points-of-difference.• As a “fashion” brand Snapple consumption needs to be socially reinforced• Weak in “warm channels” including supermarket sales• Vulnerabilities in their relationship with controversial public figures

Opportunities• Grow their brand as a fashion beverage• Capitalize on health-conscious social patterns• Focus on their “real” personality and quirky edge• Establish nutritional education programs and draw on corporate social

responsibility• Increase their product differentiation and establish a clearer brand image• Produce other “alternative” beverages i.e. bottled water and non-premium

Threats• Intensely competitive nature of market -Emerging markets• Healthy lifestyle and eating trends• Volatile consumer preferences• Potential government regulation in soft drink industry

SWOT

Perceptual Map of Snapple:

• 100% Natural Flavors

• Available beverage sizes

• Packaging

• Variety

• Use of Glass bottles

• Brand's quirky image

Points of Differentiation Points of Parity

• Quality

• Accessibility

• Taste

Brand Mantra: Fun, Fresh & Real